I have been baffled by this, as the percentage of protection sales to mortgage sales in our own network had in fact remained steady all year. Indeed, if you looked at the percentage of protection sales against mortgages where it is most realistic to expect a protection sale, the rate has increased, given the recovery in remortgaging and the huge growth in buy to let business last year.
In both of these markets, propensity to buy protection is much lower than in straightforward house purchase business. More difficult, but not impossible.
The received wisdom is that mortgage sellers have become “too busy” to undertake protection advice and sale, and so put it off at the first interview, perhaps never to return to it. But with sales across the industry averaging fewer than two per adviser per week, can they really be too busy?
But why would our network be different from other players in the marketplace? Perhaps because of heritage – many of our appointed representative firms were founded in the life insurance market and have moved into mortgages rather than the other way round.
Or perhaps it is because the good habits ingrained in the advisors of determining customer needs and then selling to meet that need really work. Or perhaps it is just because in terms of remuneration – pounds for hours work – protection sales beat mortgage sales hands down.
In any event, talking down the market can become a self-fulfilling prophecy. If everyone thinks no one else is selling protection alongside the mortgages they sell, the risk is they will think, “why bother”?
But we know the answers to that – from the regulatory obligation to advise on protection once you have said you will do that in the IDD through to the moral obligation of doing a good job for the customer.
Look at your own data, be realistic, and you might just be surprised what you find.
Stephen Smith is director of mortgage club and housing at Legal & General
